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Tissue Engineering Revenues Rise

Spending and sales (black) in billions for tissue engineering and stem cell therapeutics for 2007 and 2011. Preclinical and clinical trials stage spending is shown in ash gray while commercial stage spending is light gray. [Tissue Engineering Part B]

More than half (52%) of the companies comprising the tissue engineering (TE) and stem cell industries are revenue-generating, compared to about 21% four years ago, according to an analysis published in Tissue Engineering Part B. Of those companies, 31% having commercial products and 21% are service-based; another 30% have products in clinical trials.

“Today, the industry has begun to understand how to manufacture and market TE and stem cell products, sustaining itself and still growing,” concludes a team of authors led by Robert Langer, Sc.D., David H. Koch Institute Professor at the Massachusetts Institute of Technology.

The data collected by Dr. Langer and colleagues between 2007 and mid-2011 “suggest the TE and stem cell industry has stabilized and is on a path pointing toward continued success,” state the authors in the article entitled Progress in the Tissue Engineering and Stem Cell Industry: Are We There Yet?

They report that the industry is just attaining profitability, with sales revenues reaching $3.5 billion and industry spending approaching $3.6 billion, and “appears to be on a positive trajectory,” although they anticipate “that there may be growth pains as the industry matures."

Up until his passing in 2009, Michael Lysaght, Ph.D., professor at the Center for Biomedical Engineering at Brown University, had periodically tracked the growth of the tissue engineering and stem cell industry, publishing his findings in Tissue Engineering.

More than a decade ago he wrote, “tissue engineering research and development was being pursued by 3,300 scientists and support staff in more than 70 startup companies or business units with a combined annual expenditure of over $600 million.”

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Sales for Commercial Products or Services

A follow-up accounting in 2008 concluded the following: “As of mid-2007 approximately 50 firms or business units with over 3,000 employees offered commercial tissue-regenerative products or services with generally profitable annual sales in excess of $1.3 billion…In addition, 100 development-stage companies with over 55 products in FDA-level clinical trials and other preclinical stages employed 2,500 scientists or support personnel and spent 850 million development dollars in 2007.

“These totals represent a remarkable recovery from the downturn of 2000–2002, at which time tissue engineering was in shambles because of disappointing product launches, failed regulatory trials, and the general investment pullback following the dot-com crash.”

The 2012 analysis by Dr. Langer’s group reported a nearly threefold increase in commercial sales for TE and stem cell products and services compared to the previous four-year period. Furthermore, the number of companies selling products or offering services increased by more than twofold to 106.

Although the industry remains a long way off from achieving its potential, the fact that it has matured sufficiently to reach the break-even point shows that “clearly it is making an impact on patients’ lives and on worldwide industry,” says Dr. Langer.

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Organogenesis’ cell banks are the foundation of its cell-based technologies. It can take several years to generate a cell bank. This multistepped process begins with procuring the donor tissue.

“The growth over recent years has certainly been encouraging and is evidence that businesses can be made of tissue-engineered/ regenerative medicine products,” says Chris Gemmiti, Ph.D., chairperson of the Tissue Engineering Industry Council and product director, oral regeneration, Organogenesis. “I expect the field to continue along the path of productivity, but as an industry, we still have plenty of room for improvement and have not yet reached our fullest potential.”

Tissue Engineering journal formed the Industry Council for the purpose of helping to guide the evolution of the industry and to create strategic initiatives aimed at overcoming some of the R&D, manufacturing, and regulatory challenges facing the industry.

“The hype in the 1990s got ahead of the reality,” says Laura Nikalson, M.D., Ph.D., a member of the Industry Council, founder of Humacyte, and professor in the department of anesthesiology and biomedical engineering, Yale School of Engineering and Applied Sciences. Throughout the 1990s, TE companies were so overhyped and overvalued that by 2002 many had folded or were near folding and in trouble, she notes. By 2007, there was a resurgence and TE companies were starting to sell products.

“Some had become profitable and interesting enough so that in the last couple of years we have seen some major acquisitions of cell therapy companies, which I didn’t think would happen this soon.” Examples include the acquisition by Shire Pharmaceuticals of Advanced BioHealing in 2011 and of Pervasis Therapeutics in 2012.

Defining Therapies

As the current report notes, “The line between TE technology and other types of medical technology is often not clear and highly dependent upon the definitions imposed at the time.” In the analysis by Dr. Langer and co-authors, “TE and regenerative medicine are used interchangeably. Further, stem cell therapeutics are included, consisting of both cell-based therapies and stem cell banking.”

Defining the scope of the TE, regenerative medicine, and stem cell industries can be challenging. The definition has been somewhat of a moving target, and understanding what products and services do and do not fall within the scope of the definition is critical to interpreting and understanding an economic analysis such as this one.

For example, the authors of the 2007–2011 analysis in Tissue Engineering opted to exclude Dendreon’s cell-based immunotherapeutic Provenge® from their data. Although “often touted as a breakthrough TE technology,” stated the authors, “it does not provide any regenerative or reconstructive function to a damaged organ or tissue. Dendreon is at the commercial stage and generates about $72 million in sales. Had they been included, the industry market cap would have been drastically increased by $1.86 billion.”

The 2012 analysis excludes research focused on cancer stem cell therapy and “all medical technology in the cancer space.” The authors chose to include stem cell banking companies as commercial entities in the stem cell industry. They also included contract research organizations (CROs) that provide services for other TE firms in their analysis.

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